Morewitz v. West of England Ship Owners Mut. Protection and Indem. Ass'n (Luxembourg)

• Decision Date: 13 March 1990
• Docket Number: No. 88-7497,88-7497
• Citation: 896 F.2d 495
• Parties: Stephen J. MOREWITZ, as Administrator of the estates of Christos Passalis, Constantinos Stamatis, Gerassimos Markatos, Georg Marangos, Jesus Ramos Mayorquin, Efran Alvarado Martinez, and Mukhtar Ahmed, Deceased, Plaintiff-Appellant, v. THE WEST OF ENGLAND SHIP OWNERS MUTUAL PROTECTION AND INDEMNITY ASSOCIATION (LUXEMBOURG), Defendant-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 495

896 F.2d 495

1990 A.M.C. 1507

Stephen J. MOREWITZ, as Administrator of the estates of Christos Passalis, Constantinos Stamatis, Gerassimos Markatos, Georg Marangos, Jesus Ramos Mayorquin, Efran Alvarado Martinez, and Mukhtar Ahmed, Deceased, Plaintiff-Appellant, v. THE WEST OF ENGLAND SHIP OWNERS MUTUAL PROTECTION AND INDEMNITY ASSOCIATION (LUXEMBOURG), Defendant-Appellee.

No. 88-7497.

United States Court of Appeals Eleventh Circuit.

March 13, 1990.

Ross Diamond, III, Diamond, Leon & Barter, Mobile, Ala., for plaintiff-appellant.

Joseph M. Allen, Jr., Gregory C. Buffalow, Johnstone, Adams, Bailey, Gordon, & Harris, Mobile, Ala., for defendant-appellee.

Appeal from the United States District Court for the Southern District of Alabama.

Before TJOFLAT, Chief Judge, JOHNSON, Circuit Judge, and ESCHBACH ^*, Senior Circuit Judge.

ESCHBACH, Senior Circuit Judge:

Plaintiff-Appellant, Stephen J. Morewitz, administrator of the estates of several deceased seamen, filed this action in federal district court seeking to recover on a marine protection and indemnity policy issued by the defendant-appellee, The West of England Ship Owners Mutual Protection and Indemnity Association ("West of England"), a Luxembourg corporation. The deceased seamen, all foreign nationals, were crew members of the M/V IMBROS which sank in international waters off Bermuda in December 1975, and which was covered at the time of its sinking by an insurance policy issued by West of England. West of England is a mutual insurance association engaged in the business of providing marine protection and indemnity insurance to owners and operators of vessels. The district court dismissed this action, without prejudice, for lack of subject matter jurisdiction. The court held that this was not a suit on a marine insurance contract, but rather an action based on a British bankruptcy statute. Plaintiff then filed a motion for reconsideration of the dismissal order, which the court denied.

From the denial of his motion for reconsideration and the court's dismissal of this action, the administrator now appeals. First, he argues that the court had subject matter jurisdiction of this action because this is a suit to execute a judgment rendered in the District Court for the Eastern District of Virginia, which he registered in the Southern District of Alabama under 28 U.S.C. Sec. 1963. Second, appellant contends that the court had subject matter jurisdiction because this is a suit on a marine insurance contract, which falls under our federal admiralty jurisdiction. Finally, appellant asserts that the court erred in deciding a factual issue without hearing evidence on the merits. For the reasons stated below, we reverse the district court's dismissal of the action for lack of subject matter jurisdiction because we disagree with its determination that this is not a suit on a marine insurance contract.

I.

This action arises out of the sinking of the M/V IMBROS, with the death of all crew members, somewhere off Bermuda in December 1975. Carrying a cargo of railroad ties, the ship was en route from Mobile, Alabama to Port Cartier, Quebec, Canada. Morewitz, the appointed administrator of the estates of the deceased crewmen, brought a wrongful death action against the vessel owner of record, Imbros Shipping Company, Limited ("Imbros Shipping"), a Cypriot corporation, and against the vessel's managing agent, General Development & Shipping Enterprises Company, Limited ("General Development"), a Cypriot corporation, in the United States District Court for the Eastern District of Virginia. The court dismissed Imbros Shipping as a party to the suit prior to trial for lack of personal jurisdiction. The court, however, determined that it had personal jurisdiction over General Development. Since General Development had failed to respond to the court's discovery orders, the court, pursuant to Rule 37(d) of the Federal Rules of Civil Procedure, found it to be the owner pro hac vice of the ship at the time of the loss. The court then determined that General Development was liable for the deaths of the ship's crew members. On April 3, 1980, the court entered a judgment against General Development for damages in the amount of $459,456.36. General Development appealed, and the Fourth Circuit Court of Appeals affirmed the judgment. 660 F.2d 491 (4th Cir.1981). Subsequently, General Development became insolvent, and the judgment remains unpaid.

On June 26, 1985, plaintiff filed this suit in federal district court against West of England seeking both to recover proceeds under a marine insurance policy that West of England had issued and to enforce the judgment entered by the United States District Court for the Eastern District of Virginia which was registered in the Southern District of Alabama under 28 U.S.C. Sec. 1963. In 1975, West of England had issued a marine protection and indemnity policy covering the M/V IMBROS. The policy was in full force and effect at the time of the vessel's sinking in December 1975.

On August 28, 1985, West of England filed a motion to dismiss on several grounds, including that the court lacked subject matter jurisdiction over plaintiff's complaint. The court denied this motion. Apparently, the defendant filed another motion to dismiss or orally revived its earlier motion because the court held a hearing on the motion to dismiss on February 21, 1986. ¹ Shortly thereafter, Morewitz registered a certified copy of the judgment entered by the United States District Court for the Eastern District of Virginia in the District Court for the Southern District of Alabama. In addition to filing a brief in opposition to defendant's motion to dismiss, on March 28, 1986, Morewitz filed an amended complaint.

In his amended complaint, Morewitz alleges that this is an action on a marine insurance contract, which falls under the federal admiralty and maritime jurisdiction pursuant to 28 U.S.C. Sec. 1333. He further alleges that General Development procured the certificate of insurance from defendant to insure "against losses which might be sustained by reason of claims and judgments for personal injuries and death occurring aboard" the M/V IMBROS. Plaintiff's Amended Complaint, Rec. 25, at 4. The defendant then refiled its motion to dismiss, on April 3, 1986, arguing that the court lacked subject matter jurisdiction over the action.

On May 19, 1988, the district court held a hearing on defendant's motion to dismiss the action. Subsequently, on June 29, 1988, the court dismissed, without prejudice, this action pursuant to Federal Rule of Civil Procedure 12(b)(1). First, the court held that rather than being an action on a marine insurance contract, this suit is based on a British bankruptcy statute. Second, the court ruled that jurisdiction did not exist pursuant to 28 U.S.C. Sec. 1963 because plaintiff is seeking to assert a new cause of action against an entity that was not a party to the action in the Virginia suit. Plaintiff then filed a motion for reconsideration of the court's order dismissing the action for lack of subject matter jurisdiction, which the court denied on July 7, 1988.

II.

Morewitz now appeals from the district court's dismissal of this action for lack of subject matter jurisdiction. He contends that the district court had subject matter jurisdiction over this dispute because this is a suit on a marine insurance policy which falls under our federal admiralty jurisdiction pursuant to 28 U.S.C. Sec. 1333. ² He concedes that the deceased seamen were not named insureds under the insurance policy, but argues that this fact is irrelevant for purposes of determining subject matter jurisdiction. In rebuttal, West of England asserts that this fact is relevant. According to West of England the deceased seamen were neither parties to the insurance contract nor third party beneficiaries of it and, therefore, invocation of admiralty jurisdiction on the basis that the suit is one on a marine insurance contract is improper. The deceased seamen are allegedly suing under rights created by an English bankruptcy statute, The Third Parties (Rights Against Insurers) Act of 1930. ³ Thus, argues West of England, this case involves something other than admiralty.

In its order dismissing this action, the court concluded that the basis of the plaintiff's complaint was the English statute. The court noted that the plaintiff alleged in his complaint that English law governs this dispute, and that he attached a copy of the text of the English statute to the complaint. The court quoted from a portion of the plaintiff's complaint in which he alleged that because a receiver had been appointed over General Development's assets in Cyprus, "its rights to indemnity under the said contract of insurance with the Defendant have become vested in the Plaintiff, who now has standing to sue the Defendant under the above-mentioned provisions of said statute." Plaintiff's Amended Complaint, Rec. 25, at 7. From this, the court concluded that "it is clear that the plaintiff's action is based on a British bankruptcy statute which is not maritime in nature." District Court's Order, Rec. 35, at 5. Although the court did not detail its reasoning, it seems that it felt it was faced with an either/or decision--either this action concerns foreign bankruptcy or this action concerns admiralty--and made its decision in favor of bankruptcy.

The lower court erred in both the characterization and resolution of its decision. Morewitz alleges, in his amended complaint, that he is seeking to recover on a marine protection and indemnity policy which West of England issued on the M/V IMBROS. Plaintiff's Amended Complaint, Rec. 25, at 1, 4. This is enough to confer subject matter jurisdiction, for it is well settled that a suit on a contract of marine insurance falls within our federal admiralty jurisdiction. Kossick v. United Fruit Co., 365 U.S. 731, 735, 81 S.Ct. 886, 890, 6 L.Ed.2d...